National announces innovative automobile and equipment securitisation program - 22 August 2002

Medical Finance Series 2002-1 Trust, a special purpose securitisation vehicle arranged by the National Australia Bank, has launched today a Medium Term Note issue backed by automobile and equipment loans to medical practitioners.

As the first issue in the Medical Finance Securitisation Program, Medical Finance Series 2002-1 Trust will purchase hire purchase and chattel mortgage contracts originated by Medfin Australia Pty Limited ("Medfin").

Medfin is a wholly owned subsidiary of MLC Limited ("MLC") and has operated in this specialised finance area since 1996, originating over $750 million of loans.

The $106 million issue is the first public securitisation of specialised automobile and equipment loans launched in the Australian market.

David Carmody, Director Securitisation at the National, said: "The specialised nature of the Medfin business, which lends predominately to medical practitioners, has had a strong portfolio performance over time. This has produced the lowest levels of subordination yet achieved by any automobile and equipment securitisation in the domestic capital market."

The Medium Term Notes issued by Medical Finance Series 2002-1 Trust will consist of the following note structure:

Mr Carmody also highlighted the innovative nature of the amortising subordination in the issue.

"As part of the structuring of the deal, the subordinated notes are allowed to amortise if pool performance levels remain within the ranges agreed with Standard and Poor's. This allows for the maintenance of higher cash flow levels in the later stages of the deal.

"Investor feedback following our roadshow, held during the first week of August, has been positive and the transaction is to launch and price today (Thursday 22 August) with settlement occurring on 27 August," added Mr Carmody.